A dynamic interaction between bioactive products of the embryo (blastocyst) and the endometrium is crucial for the successful establishment of pregnancy. In ruminants, the principal signal for maternal recognition of pregnancy is interferon-τ (IFNT) secreted by the trophoectoderm between Days 8 and 20 post-fertilization. Epidermal growth factor (EGF) produced by the endometrium acting through EGF receptors (EGFR) present in the blastocyst seems to regulate embryonic production of IFNT. Epidermal growth factor and IFNT have been shown to play crucial roles in controlling luteolytic prostaglandin (PG) F2α (PGF) and luteotropic PGE2 production by bovine endometrium. However, it is unknown how these bioactive molecules regulate uterine function during maternal recognition of pregnancy. To clarify the main source of EGF in bovine endometrium and the mechanisms regulating the interaction between the hatched blastocyst and maternal uterine environment, the production of EGF by cultured endometrial epithelial and stromal cells and the effects of EGF on embryonic IFNT and PG were investigated. In addition, the effects of EGF on PGE2 and PGF production by cultured epithelial or stromal cells were examined. Endometrial epithelial and stromal cells were enzymatically isolated on the day of ovulation, seeded at a density of 100 000 viable cells mL–1, and cultured at 38°C in a humidified atmosphere of 5% CO2 in air. After the cells reached 90% confluence, they were cultured in the presence or absence of EGF (0.1, 1.0, 10, and 100 ng mL–1) for 24 h. Cells cultured in the absence of EGF and their cultured media were collected separately for protein analysis. Hatched bovine blastocysts (Days 8–10) were also cultured and exposed to EGF (1, 10, and 100 ng mL–1) for 24 h. Protein concentrations of EGF and IFNT in the cultured media were determined by commercial enzyme immunoassay kit. Hormonal concentrations were analysed by ANOVA followed by Fisher's protected least-significant difference procedure (PLSD) as a multiple comparison test by StatView (Abacus Concepts Inc., Berkeley, CA, USA). The concentration of EGF in the culture media of epithelial cells cultured in the absence of EGF was significantly (P < 0.05) higher than in the cultured media of endometrial stromal cells. Epidermal growth factor (10 and 100 ng mL–1) increased embryonic production of IFNT and luteotropic PGE2 production but not luteolytic PGF by hatched blastocyst. EGF (100 ng mL–1) increased both PGE2 and PGF production (P < 0.05) by cultured endometrial epithelial and stromal cells. The overall results suggest that endometrial epithelial cells rather than stromal cells are the main source of EGF. Epidermal growth factor produced by epithelial cells stimulates the production of IFNT by bovine trophoblasts. The capacity of conceptus to increase IFNT and luteotropic PGE2 production rather than luteolytic PGF in response to EGF stimulation may be essential for the establishment of pregnancy in cattle.